Meaning of Ltd, Inc, Co, PLC, LLC Abbreviations Used by Businesses

  • A collage of Kenyans applying for business registration and certificate of incorporation
    A collage of Kenyans applying for business registration and certificate of incorporation
    Victor Matara
  • Deciding on a business's legal structure is one of the key steps in the inception stage. 

    Financial experts say that the legal structure is determined by the composition of the business, from the business type to the number of owners or investors, and how it pays taxes and manages liabilities. 

    The abbreviations that come after your business name thus indicate its structure. Most Kenyan companies have Ltd, Inc, Co, PLC or LLC at the end of their business name.

    Therefore, legal implications and liability degrees are associated with each type of abbreviation

    From Right: Deputy President Rigathi Gachagua, President William Ruto, NSE Chairman Kiprono Kittony, Nairobi Governor Johnson Sakaja among other guests during the official launch of Trading Bill
    From Right: Deputy President Rigathi Gachagua, President William Ruto, NSE Chairman Kiprono Kittony, and Nairobi Governor Johnson Sakaja among other guests during the ringing of Trading Bell in a past event
    File

    Limited (Ltd) and Incorporated (Inc)

    Ltd is usually an abbreviation for Limited. This is the most commonly used legal structure of businesses in Kenya.

    In these companies, the owners have limited liability regarding debts incurred by the business entity.

    Responsibility for debt incurred is calculated using the amount an individual invested in the company.

    The reprieve is only applied if the business operates within the confines of the law. The shareholders will be held liable if the company falls into debt. 

    Incorporated (Inc) is used interchangeably with Limited (Ltd) as they enjoy the same legal structure

    Company (Co)

    Co is an abbreviation used to denote company. Unlike other business abbreviations, Co does not carry meaning as a specific legal structure on its own.

    Company (Co) means an association of people working in a for-profit organization or industrial enterprise.

    Public Limited Company (PLC)

    Limited (Ltd) refers to a Private Limited Company, while PLC stands for Public Limited Company.

    The difference between the two is in the mode of raising capital. Private Limited Companies (Ltd) can raise capital by selling shares, but unlike PLCs, they cannot trade on the stock exchange.

    If an Ltd company wants to raise money through the stock exchange, it has to change its business structure to a PLC business entity.

    Limited Liability Companies (LLC)

    Instead of shareholders, owners of an LLC company are referred to as partners. It is the most commonly preferred type of business registration by lawyers.

    In LLC, all profits and losses are passed down to the partners, who report them as part of their taxable income.

    Just like in Ltd, partners in an LLC are protected from liability

    CS Moses Kuria speaking to KAM
    Trade Cabinet Secretary Moses Kuria addresses a meeting with the Kenya Association of Manufacturers on October 28, 2022.